(March 20 – 10:40 ET) – The stock exchanges of Amsterdam, Brussels and Paris have agreed to merge to create EURONEXT. It will be the region’s second-biggest exchange after London’s FTSE.

The merger was announced this morning after receiving unanimous board approval on Saturday, March 18. The merged exchange will have more than 1,300 listed companies with a total market capitalization of about US$2.3 trillion. It will also be the largest equity and index options market in Europe with over 230 million contracts traded in 1999. Shareholders of the three exchanges will take shares in EURONEXT in trade for their existing shares and which aims to go public by the end of this year.

Proponents of the deal say it is key on the way to developing a single European stock market. Both investors and issuers should benefit from the increased liquidity of the new larger market. Equity trading will be based in France, the French market accounting for 66% of the new exchange’s listings.

The new exchange will maintain a presence in each of Paris, Amsterdam and Brussels while operating a fully-electronic exchange. EURONEXT will be incorporated as a new Dutch company governed by a 12-member supervisory board and a managing board of the three existing exchanges’ presidents. Jean François Théodore, chairman and CEO of Paris BourseSBFSA will be the first chair and CEO of the new exchange, George Möller, president of the Amsterdam Exchanges will be chief operating officer, and Olivier Lefebvre, president of the Brussels Exchanges will be general secretary.

A steering committee has been established to manage the integration process, which is expected to be complete by September of this year. ABN AMRO advised on this arrangement. Once integration is complete EURONEXT intends to continue to consolidate the European trading business by merger and acquisition. This merger is a major breakthrough in the history of exchanges and a step forward in ending the fragmentation of European markets. It shows that partners sharing the same European vision are able to team up in order to create an innovative structure. I am particularly proud of being associated with George and Olivier in this venture, said Jean-François Théodore.
-IE Staff

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